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EDITORIAL AO, Ocado, DFS and the BRC show how far retail has shifted online during lockdown

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In today’s InternetRetailing newsletter we’re reporting as the latest retail sales figures reflect a massive shift online since the Covid-19 lockdown.

The figures from the British Retail Consortium (BRC) suggest that half of all retail sales took place online in June for the first time. Online sales growth of 48% helped to drive the strongest growth across retail since May 2018.

The figures are aptly illustrated today by results from both Ocado, AO World and DFS, which show how digitally-forward pureplay retailers have benefited from the coronavirus lockdown. Ocado’s Tim Steiner, indeed, suggests that lockdown has redrawn the landscape for grocery sales – and that it won’t change back. AO World says it will focus on “brilliant service” to ensure its new lockdown customers never look back. 

But DFS is counting the cost of closed shops during lockdown in its latest trading update. Even though its online sales grew quickly in lockdown, that wasn’t enough to make up for closed shops and the retailer expects to report a full-year loss. It’s not yet clear whether today’s news that shoppers will have to wear masks when they visit shops from July 24 will encourage or discourage shoppers from going online to shop but we’ll be watching to see how footfall is affected. 

Clearly pureplay retailers have made huge gains in recent months that we can expect to see consolidated in the months and years to come. In its figures, though, DFS points out that stores will still play an important role for multichannel retailers, and it expects to have as many as 70 stores for its Sofology brand, which started life as a pureplay business. Stores, we’d argue, will still stay relevant for shoppers who want to touch, see and feel an item before they buy it, for those who want to get the products they want to buy quickly – and for retailers who want to keep their returns lower. Shoppers who have had the chance to see and try an item must be less likely to return it. 

In a timely guest comment Lars Larsson of Varnish Software considers why now is the time for retailers to ensure their online retail strategy is working for them.

And we also report as Quiz becomes the latest fast fashion retailer to review its supply chain amid low pay allegations. 

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